Understanding your capacity factor
What a good capacity factor looks like
Most fixed-tilt commercial solar systems in the US run a capacity factor between 15% and 22%, depending on location and system losses. A 150 kW system in a region with 4.8 peak sun hours a day, with typical 82% system losses, produces about 215,496 kWh a year, a capacity factor of about 16.4%. That's a normal, healthy number for a rooftop or fixed ground-mount system. The National Renewable Energy Laboratory's Annual Technology Baseline for commercial PV publishes the modeled capacity factor ranges these figures are based on, broken down by regional solar resource class. A size estimate is only half the decision for a business. The quick financing comparison tool in our Financing section can help you work out which way to pay for the system costs less.
Capacity factor versus panel efficiency
Panel efficiency measures how much of the sunlight hitting a panel gets converted to electricity, typically 19% to 22% for commercial panels. Capacity factor measures something different: how much energy the system actually produces over a year compared to what it would produce if it ran at full nameplate output nonstop, which is naturally much lower since the sun isn't shining at full strength around the clock. Once you have your annual kWh figure here, plug it straight into the payback calculator as your production input. For the system sizing side of this decision, see roof space vs. output estimator. If you want a second opinion on the size itself, the quick 5-minute system size estimator in our System Sizing section works from your roof area and daily load instead of your building type.
How mounting type changes the number
Single-axis tracking typically adds 15% to 25% more annual production compared to a fixed-tilt system at the same site, by keeping panels angled more directly toward the sun throughout the day. That same 150 kW system with tracking instead of fixed tilt jumps to roughly 258,595 kWh a year, closer to a 19.7% capacity factor, though tracking systems cost more upfront and need more ground space. For the tilt and tracking side of that math, the array tilt angle optimizer in our system sizing section can help fine-tune the fixed-tilt scenario, and run the NPV calculator with both scenarios to see whether the extra production justifies the extra cost.
What this calculator doesn't account for
This is a simplified estimate using average daily sun hours rather than a full hour-by-hour irradiance model. It doesn't account for site-specific shading, snow cover, or unusual weather patterns, and the EIA has documented how capacity factor varies by state, showing why a Southwest system routinely outperforms one in the Northeast even at the same nameplate size. Use the shading analysis tool if your roof or site has partial obstruction, since that can meaningfully lower actual production below this estimate, and the roof space vs. output estimator for the same roof-to-output tradeoff from a residential angle.